- Rising temperatures and droughts are here to stay
- Some stocks from sectors such as desalination, power generation, and refrigeration can benefit from this
- Let's take a look at four such stocks that are well-positioned for this trend
Summer temperatures are on the rise, and heat waves are becoming more frequent than ever before. As if that's not enough, July broke all records as the hottest month in history, while droughts continue to loom large, with increasing severity.
Facing this challenging new reality, experts warn that it's not a passing phase but a long-term shift that's here to stay and likely to intensify.
In light of these changes, we've carefully selected four stocks that not only weather these conditions but actually thrive under rising temperatures and drought scenarios.
Let's take a deep dive and see if these stocks are worth buying at current levels.
1. Bloom Energy
Bloom Energy (NYSE:BE) is headquartered in San Jose, California. It was founded in 2001 under the name Ion America before rebranding as Bloom Energy in 2006.
When temperatures soar, we've all experienced how the electrical system can suffer, leading to frustrating power outages that can be brief or even prolonged.
Fortunately, Bloom Energy steps in to address this issue by providing fuel cells for critical facilities like data centers and hospitals.
Essentially, it offers a safeguard against power outages, ensuring that vital services and companies that cannot afford to be without electricity are well-protected.
On May 9, the company released the latest earnings, which surpassed market expectations, receiving positive attention from investors. We can look forward to more insights soon, as its next financial update is scheduled for August 3.
Based on its projections, the company anticipates a substantial revenue increase of 21.7% for this year and a promising 29.3% growth by 2024.
Bloom Energy's shares have been showing positive performance, rising by +8.27% in the last month and an impressive +10.71% in the last 3 months.
The company currently holds 22 ratings, with 14 being a "buy," 8 as a "hold," and none indicating a "sell" recommendation.
The market views Bloom Energy as having significant potential, estimating its value at around $24-25 per share. This optimism stems from the belief that the company is well-positioned for robust growth and profitability improvement until the end of the decade.
2. Carrier Global
Carrier Global (NYSE:CARR) is headquartered in Florida, with a remarkable history dating back to its founding in 1915.
Renowned for manufacturing top-notch refrigeration and air conditioning equipment, Carrier boasts a widespread customer base across 160 countries. Interestingly, Willis Carrier is credited with inventing modern air conditioning in July 1902, marking a significant milestone in the company's legacy.
it distributes an annual dividend of $0.74 per share, adding to its attractiveness. Recently, on July 27, the company unveiled its latest financial results, surpassing market expectations.
The next results are scheduled for release on October 26, and analysts are anticipating another strong performance.
Speaking of the future, revenue forecasts for this year project an impressive +9.7% increase and a steady +3.7% growth by 2024.
What's more, Carrier's strategic collaboration with German industrial manufacturer Viessmann is set to propel its expansion into new geographies and drive aftermarket service revenues.
Carrier Global currently holds 23 ratings, with 9 as "buy," 13 as "hold," and 1 as "sell." The market estimates its potential value to be within the range of $65-68.
Impressively, the company's shares have rallied in recent periods, rising by +19.50% in the last month, a remarkable +44.19% in the last 3 months, and an impressive +50.50% over the past year.
The trend for Carrier Global is bullish as it tries to consolidate after breaking through resistance.
3. Cummins
Cummins (NYSE:CMI), founded in 1919, is a leading manufacturer and distributor of commercial refrigeration systems and power generation systems. Based in Indiana, it operates in a remarkable 190 countries worldwide.
On September 7, Cummins will distribute a dividend of $1.68 per share. To be eligible to receive it, investors must hold shares before August 24. The annual dividend yield stands at an impressive +2.54%.
The company unveiled its latest earnings on May 2, exceeding all initial estimates with outstanding performance. The upcoming results, scheduled for August 3, are also anticipated to be positive.
Cummins' solid financials and widespread operations demonstrate its position as a reputable player in the industry.
Cummins currently has 22 ratings, with 7 as "buy," 15 as "hold," and none as "sell." The market estimates its potential value to be within the range of $280-300.
The company's shares have shown impressive growth in recent periods, rising by +6.68% in the last month, a significant +17.26% in the last 3 months, and a commendable +24.50% over the past year.
Cummins' uptrend remains intact, and it is approaching its resistance level.
4. Energy Recovery
Energy Recovery (NASDAQ:ERII) is a company headquartered in San Francisco that addresses the critical issue of water scarcity through desalination solutions.
In light of the increasing drought and water scarcity, desalination emerges as a promising solution, yet currently, less than 3% of the world's water supply is desalinated.
This makes Energy Recovery's work highly significant, as it is focused on enhancing the efficiency of desalination plants, aiming to reduce costs and improve accessibility.
The company's primary sources of revenue predominantly come from contracts in Qatar and the United Arab Emirates. Additionally, it is expanding its presence in other key regions such as the United States, China, and India.
Notably, the San Francisco-based company recently secured substantial contracts valued at almost $17 million for the development of desalination facilities in the Gulf region, further reinforcing its position in the industry.
The stock has been on an upward trajectory, showing remarkable gains in recent periods. Over the last 3 months, it surged by an impressive +37.58%, and in the past 12 months, it soared by +37.95%.
Taking a broader view, its growth becomes even more remarkable, with a surge of +233% over the last 5 years and a staggering +498% over the last decade.
This clear upward trend started after the stock broke above a significant inflection point in June, which was a resistance.
***
Disclaimer: This article is written for informational purposes only; it is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation, advice, counseling, or recommendation to invest. We remind you that all assets are considered from different perspectives and are extremely risky, so the investment decision and the associated risk are the investor's own.